The Mammoth Town Council on Thursday found out. In a special meeting that followed a closed-door session, the council unanimously approved a $4.4 million loan from itself, payable to itself.

It was a nifty piece of financial juggling.

Under the terms of a resolution, the town will “borrow” the money from its Vehicle Replacement Fund, and place it in the General Fund.

“The Town full intends to work with its creditors, employees and other interested parties, including Mammoth Lakes Land Acquisition, toward a comprehensive debt restructuring plan,” said assistant town manager Marianna Marysheva-Martinez in a report to the council.

“This would help address the town’s existing fiscal challenges in a sustainable, long-term manner while offering a payment of the town’s legal obligations that the town can afford.”

As of March 2012, a $0.7 million General Fund shortfall was projected for fiscal year 2011-12, and a $2.2 million shortfall for fiscal year 2012-13.

In addition, the negative balances in the Development Impact Fee (DIF) funds further exacerbate the Town’s worsening position.

As of June 30, 2011, these so-called “negatives” totaled $1,409,207. The negatives were created years ago, when the General Fund paid for essential capital projects intended to be funded by DIF fees.

These expenses have not yet been reimbursed to the General Fund, because the DIF fee collection has been slow due to the weak economy and a lack of construction.

To help stimulate the local economy, the Town Council recently voted to temporarily suspend the collection of DIF fees, and the council is further researching whether to eliminate DIF fees altogether, increasing the need to eliminate the long-standing negative balances in the DIF funds with available non-restricted cash.

The use of the loan against itself would be used as follows:

1) To pre-fund potential estimated fees of professional firms engaged to assist with the MLLA settlement process: